A few startups believe that the best people may not just be at IITs and IIMs but in other institutions as well, which may be in other parts of the country.Rajiv Singh | ET Bureau | September 13, 2015, 10:14 IST

In fact, the founder of mobile ecommerce platform Paytm, which counts Chinese ecommerce giant Alibaba and Ratan Tata among its funders, doesn't work out of a cabin. Sharma, who early this week told ET that he is contemplating a shift to Bengaluru to find good engineers as well as a middleclass environment, sits amidst his colleagues at Paytm's corporate headquarters in Noida, on the outskirts of the Capital.

If Sharma is keen to hire top engineering talent, you'd expect him to be eagerly foraging through the campuses of the premier Indian Institutes of Technology (IITs), right? Not quite. Sharma, a graduate from Delhi College of Engineering, isn't too kicked about the IIT label; or, for that matter, the Indian Institutes of Management (IIMs), either, as a hotbed for managerial talent.

"I have a strong urge to work with people who are super sharp, super intelligent and smarter than IIM and IIT grads," he says, adding that there are plenty of them.

The numbers are proof of Paytm's hiring philosophy. Of the 800-strong technology workforce, only 100 are from IITs; and of the 50-odd managers, 15 are from IIMs. For good measure, of Paytm's 10-member core team, only two are from the elite institutes, or 'India's Ivy League', as it were. "I don't think either Ivy League or pedigree matters," reckons Sharma.

Sharma may be an outlier on the Indian tech startup landscape, but he is in esteemed company. Also not too concerned about pedigree of degree is Google.

A few months ago, Laszlo Bock, head of people operations at the search giant, told CNNMoney that getting grads from Harvard, Stanford and MIT — which Google did in its younger days — was a wrong hiring strategy. Experience had taught him that state schools in places like California and New York are also breeding grounds for exceptional talent.

"What we find is the best people from places like that are just as good if not better as anybody you can get from any Ivy League school," said Bock. Evidently, Google cares little for grades too (they predict performance for the first two years of a career but don't matter after that); what it does look out for is problem-solving skills and a cultural fit (which means you need to be different rather than like Google).

Bock also said Google wants people who are intellectually humble, and care about the environment around them because "we want people who think like owners not employees".

Unarguably it will be easier to find intellect than intellectual humility on the campuses of premier institutes, be they in the West or in India. For his part, Paytm's Sharma too has more faith in the common than in the exceptional. "I believe every extraordinary begins with an ordinary," he says. Sharma, who began his "ordinary" journey in 2001, when he rolled out his mobile value added services firm One97 Communications, initially resorted to hiring talent from tier II (and lower) schools for a pretty straightforward reason: he couldn't afford to recruit from the top league. Over time, though, he realised he was getting much more than he had bargained for. "They had fire in the belly. These ordinaries made us extraordinary," says 37-year old Sharma. Apart from a handful of IIT/IIM grads, over the years Paytm has unearthed talent from lesser known institutes such as Graphic Era University and DIT University in Dehradun.

Amit Sinha, vice-president of business and people at Paytm, is convinced that hiring from prestigious institutions has its limitations.

He's learnt that through experience — not a good one — after hiring senior honchos with stellar CVs and fancy designations in India Inc. "We don't want 'trophy hires' — people who may have been chief of product or chief of technology somewhere. They may be best elsewhere but not for us," says Sinha who did his BTech from ISM-Dhanbad and an MBA from IIM-Calcutta.

Talent and Stickiness

Paytm is one of a clutch of new-age companies — etailers, app-makers, software product firms and the like — that are going beyond the IIT-IIM choices for recruitment.

And not just because these hires are more affordable. Recruitment from lesserknown institutions helps companies tap a more diverse talent pool; access talent that's willing to go that extra mile to make up for their lack of degree and pedigree; and get on board a workforce that's largely from smaller cities, which means they tend to be willing to go through the grind to get ahead.

One such startup that's betting big on non-IIT/IIM graduates is Voonik, a personal shopping app cofounded by Sujayath Ali in August 2014. Ali did his MBA f rom Indian School of Business, Hyderabad, and completed his Bachelor of Engineering from Mepco Schlenk Engineering College in Sivakasi in Tamil Nadu. Voonik has never been to any IIT or IIM for hiring, but that hasn't stopped seven grads from the premier schools from joining up.

For Ali, the guiding beacon when hiring is stickiness and this comes from spreading the hiring net across far-flung areas. "They [IIT and IIM grads] are not loyal and are constantly looking out for other opportunities," he contends, adding that for Voonik, tier II candidates have performed better than IIT/IIM grads. "This gave us the confidence to go exclusively to tier II colleges," adds Ali.

Voonik hires from colleges that city slickers are unlikely to have heard of: Kumaraguru Engineering College in Coimbatore, Tamil Nadu; Audisankara College of Engineering in Nellore, Andhra Pradesh; GITAM School of Technology in Hyderabad, Telangana; and Sree Vidyanikethan Engineering College in Tirupati, Andhra Pradesh.

"Our culture stresses on being fundamentally nice to each other and that comes naturally to tier II recruits," claims Ali. If Voonik is looking for stickiness, Frankly.me looks for attitude. Cofounded in April 2014 by IIT-Delhi alumnus Nikunj Jain, Frankly.me enables users to get answers from celebrities and experts through video selfies. Of a headcount of over 100, the startup has only four IITians on its rolls, including the cofounder, and doesn't go to these elite campuses for hiring.

Feeling of Been There

"Usually graduates from IITs and IIMs think they have already made it big in life by getting into such institutions," reckons Jain. "This kills the hunger to achieve more." Ask Jain why he prefers non-IITians despite being from the hallowed alumni himself, and Jain has a ready answer: "They [IIT grads] might be gold to the recruiter, but the recruiter is not gold to them.

So they won't stick with an organisation."

Jain goes onto say that at Frankly.me, it's about who you are rather than where you are coming from. To be sure they come from far and wide: KIET Group of Institutions in Ghaziabad, Uttar Pradesh; Chandigarh Engineering College; SRM University in Chennai, Tamil Nadu; and JRE Group in Greater Noida, Uttar Pradesh.

For Zo Rooms, a Delhi-based online budget hotel aggregator, it's the 'bright spark' in the potential candidates that turns out to be the clincher.

Founded by Paavan Nanda along with six others, including three from IIM-Calcutta in January 2015, Zo has a headcount of over 250, including 25 people from IIT and IIM.

Saumya Singh Rathore, Zo's HR head, says that almost two out of three candidates with the bright spark tend to come from less privileged backgrounds. "The more you go to relatively unknown colleges across the country, the more is the probability of striking gold," she says. So, Zo has an app developer from YMCA Institute of Engineering from Faridabad in Haryana, the head of acquisitions is from Global Institute of Technology in Jaipur and the designers are from MIT — not Massachusetts but Maharashtra Institute of Technology in Pune.

In spite of having four cofounders from IIM-Calcutta, Zo has never been to any IIM for hiring. Reason: Rathore explains that the IIM grads who have it in them end up starting their own venture and those left in the campus are usually risk averse. "They tend to play safe, usually have a fixed way of thinking and are very expensive hires," she says.

It isn't as if the non-IIT/IIM grads come cheap, but what works in favour of startups like Zo is that the enthusiasm to work with them is higher than with traditional corporations. And that enthusiasm often translates into a willingness to compromise on the salary front.

Consider, for instance, Utkarsh Srivastava who graduated from SRCC in Delhi, one of the top commerce colleges in the country. The 22-year old had an offer of a `8 lakh annual package from an FMCG company but was still willing to join up as an intern at Zo at just `5,000 per month. "I wanted to prove myself," says Srivastava. He's more than done that, what with his salary now bumped up to what the FMCG firm had offered him — `8 lakh per annum.

Srivastava, in Rathore's book, is doubtless a "bright spark".

The trend of an IIT or an IIM cofounded startup looking for the spark outside the big-tag schools is gaining traction. In the process, these entrepreneurs are also busting the myth that for deep tech-based firms, grads from the elite schools are a must. Never mind if the founders emerged from such institutes.

Take Mad Street Den in Chennai, an artificial intelligence-based startup founded by husband-wife duo of Anand Chandrasekaran and Ashwini Asokan in September 2013. While Chandrasekaran did his PhD from Stanford University and BTech from IIT-Madras, Asokan completed her Masters in interaction design from Carnegie Mellon University.

The duo has taken the team count to 19, of which only the founder is from IIT. Reason: they don't hire from a brand perspective and prefer 'underdogs' over the 'highly rated' ones. "We don't want rockstars. We want really smart talent that gives a s**t," says Asokan.

Not Welcome

While acknowledging that the IIT brand does bring with it a higher probability of really good math and solid core tech skills that are much needed for an artificial intelligence and computer vision firm like Mad Street Den, the startup has found the talent it needs at other institutions, like SSN Engineering in Chennai and VIT, Vellore.

Asokan, who has visited IIT-Madras for hiring, doesn't care how superior candidates are or think themselves to be. If they don't, respect diversity and work as a team, they are not welcome, she adds. And it has happened umpteen times that she found a non-IIT candidate more suited for a particular role. "The IITians just didn't have the temperament we need," she says.

Another tech-driven startup that doesn't obsess about pedigree is the two-yearyoung Wigzo, a Delhi-based contextual marketing platform that relies on data analytics and predictive algorithms to provide realtime content in emails for marketers.

Cofounder Umair Mohammed admits that their price tag is one reason he isn't willing to touch grads from the top-rung schools with a bargepole. But that's not the only reason.

"They may make for terrific founders but as employees they can be terrible," says Mohammed, who did his postgraduate diploma in entrepreneurship studies from IIM-Kozhikode, and Bachelor in Computer Application from Jamia Hamdard in Delhi.

Sumit Dinesh Ranka, founder of Thinkpot, which retails a range of motivational merchandise such as posters, mugs and stationery, has no problems with IIT/IIM grads; he just thinks that "the world is a little biased in their favour," says the alumnus of DJ Sanghvi College of Engineering, Mumbai. He believes that there is a lot of undiscovered talent outside the premium institutes.

So Ranka gets his talent from middle-ofthe-road colleges in Mumbai like St Francis Institute of Technology, Sathaye College, Idol College, Father Agnel and Thakur Education Society. "The burning desire will eventually get the skill sets, but a good skill set may not be enough to ignite the fire," he reckons.

This is not to say that all IIT/IIM grads are not startup material, and Sumesh Menon, founder of Woo, a Gurgaon-based matchmaking startup, makes the point that it is unfair to give the top dogs a bad name. "Graduates from IITs and top B-schools are usually combat-ready.

This shortens the learning curve for them," says Menon, who did his MBA from XIME, Bengaluru, after graduating from St Aloysius College in Mangalore University.

Best of Both Worlds Menon relies on a mix of IIT/IIM and tier II schools, like for instance, Netaji Subhas Institute of Technology in the Capital. But elite school or not, the rules of the game are the same for every entrant. Rule No. 1: those switching jobs have to take a 20% salary cut for a year. This helps, explains Menon, in getting to know two things: First, their willingness to work with a startup and, second, their killer instinct. "If they prove themselves, which most of them do, then I compensate them for the hit they have taken for a year."

For GreyOrange, a Gurgaon-based robotics startup with a headcount of over 300, it makes sense to go to top engineering colleges for hiring as it ensures a healthy return on investment.

"One of the reasons IITs and BITS are preferred for campus placements is because we get good folks in a shorter time and in good number," explains Kohli. But there have been times when he has come back empty handed from campus hiring. Reasons for that: the lack of practical exposure of candidates to innovative projects and lack of willingness to learn and grow. "An IIT or BITS brand name doesn't guarantee practical exposure to technology," he says, adding that the attitude of learning as much as possible is more prevalent amongst engineers from non-IITs.

Alumni from the elite technical and managerial schools are doubtless a prized lot for their intellectual bandwidth, which gets a chance to further blossom courtesy of top-notch faculty members and first-class infrastructure.

But that they will end up as firstclass knowledge workers is not quite a no-brainer. As Paytm's Vijay says: "Let's build India where performance is rewarded and not where just a degree or an institute's name entitles one to position or reward."